About this Show

Politics Public Policy Today

News/Business.

NETWORK

DURATION
02:30:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Channel 91 (627 MHz)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
704

PIXEL HEIGHT
480

TOPIC FREQUENCY

America 9, Boehner 7, Susan Rice 6, United States 6, Obama 6, Europe 5, Washington 5, Paul Ryan 4, Paul 4, Bowles 4, Chris Van Hollen 3, Libya 3, Simpson 3, Erskine Bowles 2, Cia 2, Alan Simpson 2, Alan Greenspan 2, Peter King 2, John Boehner 2, Germany 2,
Borrow a DVD
of this show
  CSPAN    Politics Public Policy Today    News/Business.  

    November 16, 2012
    8:00 - 10:29pm EST  

8:00pm
for organizing today's even. you can find more information about the national press club on our web site. if you like to get a copy of today's program, check out our website at www gotpress.org. >> next, remarks regarding the fiscal cliff from president obama and congressional leaders. that will be followed by a form with alan simpson and erskine bowles. president obama says that he and congressional leaders have urgent business to do. he mentioned taxes for the middle class and recreation. his statement came before a meeting with congressional leaders at the white house. >> i want to welcome the
8:01pm
congressional leadership. i want to thank them for their time. we are well aware that we have important business to do. we have to make sure that taxes do not go up on middle class families. we need to make sure our economy remained strong and we create jobs. that is an addendum that both parties and independents and people throughout the country share. our challenge is to make sure that we are able to cooperate together, work together, and find common ground. make the compromises and find some consensus. i think all of us agree. we need to be focus on them and not on politics in washington. my hope is that this will be the beginning of a free fall process -- fruitful process and
8:02pm
we are able to balance our deficit in a balanced way. we will be focusing to make sure that middle class families are able to get ahead. i want to thank all of the leaders for coming. with that, we will get to work. thank you. there is one other point i want to make. tomorrow is house speaker boehner's birthday. for those of you who want to wish him a happy birthday, we are not going to get him a cake because we did not know how many candles we would need. [laughter] >> thank you. >> thank you. >> following the meeting, house
8:03pm
and leaders spoke briefly to reporters. >> good morning, everyone. we just had a meeting with the president to talk about america posted fiscal problems. i outlined a framework that deals with reforming our tax code and reforming our spending. i believe the framework that i have outlined in our meeting today is consistent with the president's call for a fair and balanced approach. to show our seriousness, we have put revenue on the table as long as it is accompanied by significant spending cuts. we are going to continue to have that on the table to show the american people that we are serious about cutting spending and solving our fiscal dilemma.
8:04pm
i believe that we can do this and avert the fiscal cliff. >> this is not the first time we have dealt with these issues. we feel we understand what the problem is. i feel very good about what we were able to talk about in there. we have the cornerstones to work something out. we both will have to give up some of the things that we know are a problem. it is like when you arrive at a point where we all know something has to be done. there is no more let us do it some other time. we will do it now. we feel very comfortable with each other. this is something that we will not wait until december to do. we have a plan. we will meet with the president.
8:05pm
i think it was a very constructive meeting. i feel very good about what we were able to talk about. >> it was a very constructive meeting. we had a recognition that every person in america knows that we must reach an agreement. the speaker spoke about a framework. i was focusing on how we send a message of confidence and to consumers and to the markets. that is to say that we should have a goal in terms of how much deficit reduction, we should have a deadline before christmas, we should so some milestones so that confidence can build as we reach our solution. if we do not reach an agreement, not only will be missed opportunity for doing something
8:06pm
good for our economy, but we will have an economic downturn that must be avoided. we understand our responsibility. we understand it has to be about cuts and revenue. it has to be about growth. it has to be about the future. as we talk about revenue, we have to do so in a way that promotes growth and supports the future. it was good. i feel confident that a solution might be in sight. >> i can only echo the observations of the other leaders that it was a constructive meeting. we all understand where we are. on the part of my members is that we fully understand it cannot save the country until you have and how the programs that lift the demographic of the
8:07pm
changing america in coming years. we are prepared to put revenue on the table provided that we fix the real problem even the most of my members believe that we are in the alamo we are in not because we tax too low, but because we tax too much. we had a chance to talk with the president about his trip to burma, a country i have had a long interest in. i want to commend him for going. it is an important step to take. >> thank you. >> activists representing minority groups also met with the president and vice president. they spoke to reporters following the meeting. this is about 20 minutes.
8:08pm
>> we are ready. let me say that we just concluded a meeting for over an hour with the president and vice president with various organizational advocates. it was a very candid meeting. we discussed our concerns about the constituencies that we represent -- working class, a poor people, women, students. we laid out to the president the feelings that we get from many areas of the country. for some that we represent, it is a fiscal cliff.
8:09pm
for others, it is a sliding down from a more comfortable slow. we are there and leading across the aisle to say that we hope that there'll be an agreement in these negotiations that they go ahead and stop any hike on taxes to the middle class and the working class. that has been agreed upon in the house. that has been agreed upon by all the groups as well as the house of representatives. first, start with what we agreed with so that people despite their political and partisan views can face the holidays without an increase in taxes on middle class and working people. at the same time, we do not want those who are most of hon. to
8:10pm
be on the chopping block -- vulnerable to be on the chopping block. i think the president heard us loud and clear. i think that the president was very open and generous with hearing from each and every one of us. i think the collective message and the consensus was to build on where we are. middle class people, working class people should not be facing the holidays not knowing whether or not they will be facing an increase in taxes at the end of the year. we need immediate action. it is a cliff for some and a slide down the slope for others. let class be avoided immediately. cliff be avoided
8:11pm
immediately. >> the president was in a great mood and reposited. let me reaffirm the most important thing right now -- was in a great mood and very positive. let me reaffirm the most important thing right now for middle and working-class americans -- if those tax increases took a effect, it would have an average rate of about $3,000 per family. for someone making $55,000 per year is quite devastating. we understand the vulnerabilities of people. especially those hit by hurricane sandy. secondly, we all believe in the
8:12pm
context of this that those human investments programs that support and sustain working class and poor americans should not be the sacrificial lamb in any discussion. those programs have already been cut and reduced to an extent. we are very unified in our thinking. thirdly and finally, we stand here as representatives of organizations and constituencies that we work for, but we stand here as americans with the sincere hope that the men and women in this city can find common ground we know they can find if the all exercise good will and a commitment to the common ground.
8:13pm
we think that is one of the most important messages. there is a sincere feeling to find common ground. we thank the president for having us today. we appreciate that. sister janet and then jim. >> and the executive director of -- you probably know me ask bus. the nun on the what i take away is the president's awareness and commitment to the struggles that working class folks have in the united states. he understands that you can work for minimum wage and still be in poverty.
8:14pm
we want to make sure that working class families are protected in this important negotiation. that is at the heart of it for us. it is at the heart of 100% of our nation. he was clear that we need to have come to a resolution on this issue. these issues that we care about are coming together in this one moment. as a person of faith, i look at negotiators on all sides of the out to make sure that we find a way to settle this issue and free our economy from this brinkmanship. make sure the middle class and the working poor are taken care of. make us a wonderful nation that we are. we need to have a way forward. i heard the president's
8:15pm
commitment and all of our commitments. thank you. >> hi. my name is janet. it was an honor for me to be part of this meeting with so many distinguished leaders who are at the forefront of fighting for working class families. we work very hard to turn out a lot of votes in this election. we want to make sure that people understand that we care about the issues. one of the most important issues that we are facing in this country is the state of the country's pistole health -- fiscal health i was pleased with him affirming that we would not tax middle class families.
8:16pm
that is something we care very much about. we care about the principle to protect the most vulnerable. we saw a very confident president who extended to us a hand to work together. the election might be over, but the issues are still on the table for the country. we care very much about the future of our country. we have a big interest to make sure that we have a deal that is fair as it relates to taxes entitlements. -- to taxes and entitlements. there is a strong sense of unity by all of the leaders to fight hard for a very fair budget bill. thank you. >> these are not as political
8:17pm
issues. they are religious. despite the unfairness of the media's focus on what the religious issues are, some of the biggest issues -- like how we welcome the stranger. i want to change the conversation from a fiscal cliff to the fiscal soul of the nation. what is the fiscal soul of the nation? what kind people will we be? people who voted differently in this election, we are saying the principle is that the sense -- deficits and how to resolve them is a moral issue. during the holiday season, we're going to be reaching out to the
8:18pm
poor people and say to our political leaders, do not make decisions fiscally that make the poor poorer and make our job harder. we want to connect what is happening in the streets to what is happening in washington. we have a broken system. how do we in the book politics to do the right thing? how do we make a path to fiscal sustainability that includes us all? that is what we are talking about. how do we make a pack that includes all of us? you judge a nation not by its military firepower or its gross national products, but how we take care of the poor and the honorable? -- vulnerable?
8:19pm
make sure all of us are a part of where we are going from here. this is about the fiscal soul of the nation and not just the fiscal cliff. thank you. >> hi. and president of the oldest civil rights organization. we are in tough times. this reminds me of something my grandmother used to say. it comes down to eggs and legs. you ask the lamp to pitch in his leg. we are here to advocate for the lamb in this equation. the next debt has to be that congress steps up and passes a bill -- step has to be the
8:20pm
congress steps up and passes a bill to make sure that we preserve a tax cut for the 98% of us who cannot afford to give a $3,000 at christmas. it could be disastrous to our economy. it would be a tragedy for many families. it would create joblessness very quickly in a number of communities. we need the republicans and to really think deep and the card and to pull back from the cliffs 98% of families for whom this is a leg question. it is clear that the values of this nation -- looking forward,
8:21pm
there is reason to be hopeful. we have to focus on taking the next step. that is to ensure that a bill gets to the president's desk that pacs the 90% of us and really make up the bulk of the t makes uptha 98% of us and really make up the bulk of this nation. thank you. >> i was very encouraged by this meeting. we came out of an election were young people were very engage and came out to vote in big numbers. it was clear the president was listening to young people. he has young people in mind when he speaks about the future of the middle class and future generations. i think the president made strong point about how we need to invest and how to deal with
8:22pm
the deficit in a balanced way. looking at the middle class tax hikes that? millions of people in school and out of school and unemployed. job training and education means a lot to young people in terms of having that pathway to the middle class. it was a very positive meeting. i was encouraged to see the president listened to the concerns and the voices of young americans. >> but afternoon. i am the chair -- good afternoon. i am the chair of the national council of asian-pacific americans. my message to the president today was that the asian-pacific islanders are listening. a majority of our committee
8:23pm
members voted for the president in late last week a's election. the issues they care about are the issues that affect all americans -- immigration, education, and the state of the economy. there is a vision of shared prosperity. there are those of us who can do more and should do so. middle class family should not be under attack. put the individuals who are spending on programs -- of the individuals who are dependent on programs -- that is the image of shared prosperity. it was a very productive and constructive meeting. we felt that our issues were being heard. moving beyond the economy, we can address issues of immigration and education and other issues. >> i am the ceo of arp.
8:24pm
we represent all americans 50 +. the art two priorities for all americans and that is a financial security and health -- there are two priorities for all americans and that is financial security and health security. we do not want to fall off the cliff and into deeper party. there are conversations around -- and into deeper poverty. there are conversations around social security and how to secure for current and future generations. we want to make sure that medicare and medicaid are available. we will continue to have those conversations.
8:25pm
the president has been focused on making sure that americans continue to have security on the health side and financial side. >> good afternoon. i am the president and ceo of the leadership council and on civil and human rights. i was honored to attend a meeting today with the president and joined by my colleagues representing america today. we were here to express our unity with the president's vision of shared prosperity. we will leave you with one simple message -- we argued that it would be detrimental to the nation and the economy and to the american people that if we raise taxes on the middle class and the most vulnerable, especially as we enter the holiday season this year. that is a message that we share with the president.
8:26pm
the efforts that have been taken by the senators of the united states and the house of representatives to make sure that the taxing of the middle class and the most quotable are not raised is the message we left with the president. -- most vulnerable are not raised is the message read left to the president. thank you. >> compress was criticized for not adopting recommendations. we will hear from alan simpson and erskine bowles. all the participants included a former fed share alan greenspan -- chair alan greenspan and paul volcker. >> how many of the note how much of their lives and have put into
8:27pm
this country? you are heroes and patriots. thank you. [applause] >> all of us who are involved in this effort, we stand on the shoulders of peter peterson. if pete did not pave the trail, we would have no effort to fix the debt or bring about long- term fiscal responsibility and reform. [applause] >> i started with this marvelous man over 30 years ago, when he said we got to do something about the solvency of social security. i said, pete, am i to do that? and then we did the danforth- kerry thing. he wrote a beautiful book. here is a guy -- persistence, loyalty, patriotism. he takes a lot of flack, but he is the prince. we are on witness protection. you are the prince. [laughter]
8:28pm
>> thank you for that. >> have chatted with you several times when the commission first started, when you released it, i could listen to you talk about these issues. i wanted to jump in and get your sense of where we are, because as we speak, the president is meeting with john boehner, the first face-to-face talks, and in december of 2010, you called it the moment of truth. two years later, what moment are we in as boehner enters? >> this is a magic moment, i really do think. it is a moment when our generation has a chance to do something about this problem that we created. it is our generation that got us into this mess, and we ought to get ourselves out. we got a good chance. you got a second-term democrat president who has come out and said he is willing to put entitlements on the table. big deal.
8:29pm
you've got a speaker, a republican speaker, who really gets it, who really understands the depths of the problems we face, and he has come out and said we are going to put revenues on the table. big move. he got at least half the members of the senate already saying they will support a balanced plan, which makes a lot of sense. we have got the business community lined up firmly against -- for doing something smart, and i guess most importantly, we got this fiscal cliff where if we go over it, we are going to face the most predictable economic crisis in history. fortunately for all of us, it is also the most avoidable. this is the magic moment to get something done. >> senator simpson, we never talk of compromise. there is still division here. over the issue of taxes for the
8:30pm
wealthy. >> it seems to me to have taken the word "compromise" up a step. three years ago the word was we do not know the word "compromise." if you cannot learn to compromise an issue without compromising yourself, you should never be in any legislature and you should never marry. [laughter] the only troubling thing i see here really troubling is you have democrat leaders -- and do not forget the leaders have not helped us at all in any effective way. they listen to us and they tell their position, but they have not been out there. what is disturbing to me is the word maybe the democrats could gain if we do get off the cliff. that is out there, and then the republicans say maybe we can gain if we go over the cliff. i think that is disastrous to even think in those terms. erskine says that is like betting your country.
8:31pm
i am not quite as warmed by it all, and a couple of years ago you were the guy who said we were going over the cliff, and i said, no. >> i think we cannot be stupid enough to do it. we can resolve this problem now by making some very tough, but doable, compromises. if we go over this cliff and we do not reach a deal immediately thereafter, here is what will happen, and that is about a 1/3 probability that we will go over the cliff and nothing will happen. what will happen is you will see moody's and fitch downgrade our credit. you will see a stock market that will say we never thought these
8:32pm
guys would be stupid enough to do this. you will see a stock market that will really crash, and you will see businesses really slow back on hiring, they will flow back on their capital expenditures, investments. you will see consumer confidence go down, and we will be facing a mess, because what happens, the economic effects of going over this cliff, are enough to slow economic growth by about 3%. we are only growing at 1.5% today, so that is enough to put us back in recession. about 2 million people will lose their jobs and unemployment will go back to 9%. why would we do that when there are good alternatives that we can do compromises now during the lame-duck session? >> a compromise is out there on the table. have things changed in the time that even simpson-bowles is not the right answer now? >> there are certain things that have to be adapted, but
8:33pm
what i get a kick out of is there was chuckling. dick durbin and tom coburn have been tremendously an integral part of this. they really are superb men, and bright and patriotic, and of course the stereotyping is out there, and that hurts everything. they say is durbin part of your plan? oh, god, not him. coburn is part of your plan? not him. they are not laughing now. this is like a stink bomb in a garden party. they do not like it. it is a curse, and the real estate guys and everybody on that list of people that gain
8:34pm
tremendously from tax expenditures are out there with their fangs out right now. we knew this would come, but they never dreamed they would be talking about this plan, and now they are not just talking about it, they are talking about implementing parts of it, and they are in shock. if ain't seen nothing yet you do not think the savagery in the next few weeks putting the heat on these guys in congress, from everyone of those people are going to lose when we dump all the tax expenditures and give the people of america what they needed, a tax code with a flat 8%, up to 70 grand, up to 2010, it is all there. it is all in a 64-page report, and it is still there and it is not going away. >> our hope is during the lame duck you cannot rewrite the tax code in 48 days. for us, the american people should really be disappointed, why the rest of the country has been having what at best can be described as a very fragile
8:35pm
economic recovery, in washington all they have been having is an election. any business, if they were facing the equivalent of a $7.2 trillion in deficits, and that is what we have over the next decade, that is what the economic effect of this will become, the expiration of the bush tax cuts, the payroll tax, that patch that was put on the amt so it won't hit the middle class, the expiration of the unemployment benefits, the sequester, which was a mindless, senseless across-the- board cut came across because the failure of the supercommittee, and no business tries to balance their books doing it across the board.
8:36pm
you do it surgically and try to do things that have the least adverse effect on productivity. today we got 48 days left, and went through this election. isn't it amazing that during the election, at all four of the debates, the words "fiscal cliff" were not ever mentioned. >> no one mentioned the solvency of medicare. to think the debate took place and nobody ever got into those two big things that are driving this country. >> every day, every news organizations say "in 48 days," "47 days," and what is the senate doing? the senate went home. they are going to only work 20 days. if this was a business, all
8:37pm
hands would be working and trying to resolve this issue. our best hope is to get some kind of framework deal that will call for $4 trillion worth of reduction over the next decade, but it has got to have real substance and real clarity for the markets to think it is real, it is going to have to have been a significant down payment, it is going to have to have a real timeline, and it will have to have a fail-safe provision that is realistic, not one that somebody is going to try to walk away from this sequester. i would say it has to have somewhere around 67 votes in the senate to override it, so it will be hard for these guys to squirm out of it. >> you think that dividing lines have already taken place. if speaker boehner and the president continue to butt heads over the ideas of raising this tax rates for wealthier americans, extended the bush tax cuts, how do they reach the middle ground? >> tax rates for wealthier americans are going to go up. that is just a fact.
8:38pm
that is going to happen. what we should be talking about is how can we do it where it has the least adverse effect on productivity here in this country, where it has the least adverse economic effects. whether you do it by rates or by reducing the spending and the tax code, you are going to have to do it. it could be a combination of one or the other. i will give you examples, you could check the value of tax expenditures at 20% and then measure them down to 0% for the most wealthy, and that would generate the same amount of revenue as raising the tax rates to 39.6%. you could put up this thousand- dollar cap on tax expenditures. 91% of the money would come from people who make more than a $250,000, and would be progressive, because most of the
8:39pm
money would come from the top 81%. -- 1%. it is very progressive. there are lots of way to skin a cat, but what be got to do is talk about it because they are plenty of options. the point is we will have to have some revenue, but you got to talk about cutting spending, because that is the biggest problem. we had about $1 trillion of revenue and $3 trillion of spending cuts. >> remind us if you can about the medicare changes, the entitlement changes you talk about in your plan, and now republicans are saying have to be part of the conversation as they meet at the white house today. >> it is not just simpson- bowles. it's domenici-rivlin, and pete domenici and alice rivlin did a wonderful job. there's a lot of stuff to play with. no need for further hearings of any kind.
8:40pm
i thought what was an interesting thing in the tax expenditures, 1% of the american people use 25% of those, and 20% of the american people use 80% of them. figure that baby out, and guess who is getting the end of the pie. 20% of the american people are getting 80% of those 180-plus babies, put in there by most of the skilled lobbyists at the most appropriate time of social engineering, and only 27% of the american people itemize, so 3/4 of the american people never heard of that stuff. who is howling? "home mortgage interest deduction -- what is going happen to the housing industry?" it will survive because we said take it. who is benefiting from a million bucks in home mortgage interest deduction? we set it to $500,000, and then
8:41pm
get a 12.5% non refundable tax credit to everybody, which helps the little guy. if everybody would quit talking about the little guy, the little guy is the guy that is going to get hosed in this process if you do nothing. there is not any question about who is to get it. when the tipping point comes and they say you are dysfunctional and we want more money for our money, we know you are addicted, you have borrowed $16 trillion, so we know you want more. you borrow $3.6 billion a day, and 41 cents every day on every dollar you spend. we are going to get your money, and an interest rates will go up, and guess who gets hammered? the middle class. the fakery. >> you have some groups, and you've heard complaints, including the charitable community, very worried about what happens.
8:42pm
how would you handle that? >> we tell them to read their report, which is a sick idea. everything failed -- read this. it is 64 pages. it is in english. all these are sick things to look at, and you take a charitable deduction, you put a limit on it, and give him a 12.5% non-refundable tax credit. we knew we would be savage and we know it has got to get much more intense because when we put this baby in, these groups that together and just laughed. they had a chuckle. ha-ha. it ain't funny anymore, and now they are really, really smoked. >> people in this town talk about the need to get rid of earmarks. earmarks are $16 billion in the appropriations bill, but compare that to the earmarks in the tax code. that is $1.1 trillion a year. that is what they are not
8:43pm
talking about. we have to get serious. we have got about $2.3 trillion worth of revenue coming into the country. we're spending about $3.6 trillion. we got about a $1.3 trillion deficit, and this goes on as far as the eye can see. we have got to grow up. america has got a real problem. if we do not change, and we just take the theory and stick our heads in the ground, it will not be long before all america will be able to do is take care of a couple of old coots like me and al and buy a few tanks. we have to change. if you like education, if you think we should be investing in research, if you think we should be doing something about this $4 trillion of deferred maintenance we have on our highways and bridges, then we'd
8:44pm
better grow up, and we better understand that we have got to make some cuts throughout this budget or we will not be able to invest in anything that america has to invest in to be competitive in the future and in a knowledge-based economy. >> something has changed since december 2010, and that is the kind of support you're getting from some in the business community. are you satisfied with the level of support, and are those business leaders going far enough in offering specifics, what they are willing to sacrifice, whether it is corporate tax rates that may have to fall by the wayside? >> i will say it again -- we would not be here if it was not for the peterson foundation. they laid the groundwork. we stand here on their shoulders, but they made it possible for us to have a voice in this matter because people
8:45pm
were prepared to listen. so al and i did help form this fix the debt campaign. i hope everyone will go to our website, which is fixthedebt.org. we have over 300,000 people that have already signed a petition, trying to tell congress, please get back to work, stay there, get a balanced plan, put our fiscal house in order. we have close to 100 ceo's today who get it. they know if we go over this cliff and we do not get a deal that we are likely to go back into recession. they want some clarity. they want to be able to understand what their future tax rates are going to be. they want to be able to plan. right now capital is on strike.
8:46pm
when capital is on strike, you are not going to create any jobs. that is why they are saying, wake up. we are prepared to make sacrifices. we are prepared to do our part, but we have also got to address the spending side of the equation to get rid of these debts. >> do not forget the extraordinary progress of dave cody. he said, "who are you people? is this the way you run your government?" he said, i would get serious. he is out there. he is tremendous. but the real escape hatch that i have noticed is people come up and say i am ready to do something if everybody else will because they know the escape hatch. >> you know what this reminds me of?
8:47pm
i just finished five years as the president of the university of north carolina, and there was a nobel prize-winning scientist and his nobel prize-winning project was running out of money, so he turned to his team and said, we are running out of money and we have got to start thinking. [laughter] that is what america is. we are running out of money, and now we have got to start thinking. we have to make the hard political choices. if we do, we're going to be able to compete and win against any nation, but if we do not, we're going to stay on this path and become a second-rate power. my generation got us into this mess. we have got to get us out. we cannot wait until the next generation. >> less than a minute. >> you have the president and john boehner in the room. what is the advice you give these two men as they begin these conversations? >> sit down, have a beer, quit joshing each other, quit
8:48pm
listening to the babble from the right and the left, saying we're throwing the old lady off the cliff in the wheelchair -- [laughter] watering the earth in his white robes, telling people they raised taxes. that was a freudian thing there. [laughter] what can grover do to you? he cannot murder you or burn your house. the only thing he can do to you is defeat you for reelection or put some jerk in the primary, and if that means more to you than the country, you should not even be in the damn congress. [applause] >> your advice? >> compromise, do the right thing. now is the magic moment. it is our responsibility.
8:49pm
>> i want to thank you both. we are out of time. the conversation is going to continue here at the summit. thank you again for joining us. thank you to the two of you. i appreciate your work as well. we will be right back in just a moment as we continue here at the fiscal summit. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]
8:50pm
>> major economic events in your careers. what do think the impact would be on the economy if we go over the cliff? what if policy makers kick the can down the road for several months, but bill to address the gap between revenues and spending policies until to stabilize long-term debt? how would you answer that? >> we are not going to solve this problem in the next seven weeks or where ever we have. it will take time. we need to deal with the problem sitting here with the big sequester and the big tax increase. that needs to be dealt with. i think that can be done.
8:51pm
that will take some action on taxes and spending. it will not be the action that cures the longer term problem. it will take time to redesign the tax system. we need to do it in a convincing way. we need to deal with the yawning deficit. >> and you, dr. greenspan? >> i agree with paul. there are two separate issue here. we need to recognize that how we solve this issue will affect how we address the longer term -- the long term. my main concern is that we do not recognize how difficult a problem this will be. we have essentially picked all the low hanging fruit, so to
8:52pm
speak, of the fiscal system. we have stretched ourselves beyond comprehension. that is fundamentally the issue, spending. we have had a significant rise in so-called government and social benefits. it is going up at a tremendous rate. the great irony of this is that it is -- it went up even faster during the prudent years of air republican administration more so than with the democrats. this is a bipartisan problem. i think we really need to stop it. we need to stop it clearly. the real difficulty is dollar for dollar, it is eroding the savings of society.
8:53pm
savings is the fundamental input for capital investment. capital investment is the primary ingredient for productivity. growth and productivity have slowed down. our growth rate has slowed down. until we solve the short-term problem to get on to the longer-term problem, we will find the markets will respond very negatively. the fundamental concern is we have to realize where we're going cannot continue indefinitely because it is eating into the productivity and growth rate of the economy. if we do not have that, how do we finance our benefit programs? you can write entitlements as long as you want. where are the physical resources going to come from to meet them? i think this is a critical
8:54pm
issue. kicking it down the road will not help. the markets may respond negatively before we even notice it. that will cause a huge problem. >> i think in the case of europe, you can take any of the countries you wish, the action taken happened suddenly it seemed to me and surprisingly. do you have any sense of how much time the markets will give us before they react in a strong way? >> the one thing about markets is they do not give you advance notice. if they could give new advance notice, the problems would be arbitraged away. by definition, a crisis coming from markets does not give you
8:55pm
advance notice. we have to recognize that fact and not say we will deal with this when the crisis arises. that is late in the game. >> what do you say about that? >> i agree. you will not know when it happens. it is impossible to forecast or plan different things. you will have a crisis at some point. how do you deal with that? you cannot cure it overnight. that is for sure. spending is the crux of the problem. there is a lot of that built in. it will take years to get back to get back in relation to gdp to something sustainable. how do you create the program now that is convincing?
8:56pm
you are talking about 2013 or 2014. you have a convincing program that will get to the right place in 2020. it will take that long to get back to a balanced budget. we will not have the crisis or we will minimize the chance of a crisis if people are convinced you are on the path to deal with it. i think that is the political problem that exists at the moment. how do you convince the american public and the world that the united states is on a sustainable path? >> one of the questions i ask when i express the concerns you are expressing is, where else will they put their money?
8:57pm
that is the question i get asked by people when i express these concerns. where else are the lenders willing to put the money but the united states? the united states versus other countries. in no other countries will people put a lot of money in, so whether you worried about? that is true currently, but we cannot count on that forever. china is going to be different in a few years. japan may have some recovery. europe, we hope, gets out of its problems. we cannot say we will deal with this problem later because everyone else is worse off than we are. that is not consistent with the kind of leadership the united states needs in economic and political affairs.
8:58pm
we cannot simply accept the argument that other people are worse off than we are. >> we have had a great blessing of a reserve currency. let's talk about how permanent the arrangement is. it is very convenient. it has enabled us to finance deficits easily at low interest rates. we have to finance the balance of payments. karl marx is not a prominent figure anymore. once in awhile, he said things that were sensible. he said if you give countries enough rope to hang themselves -- look at the southern tier of europe. they could borrow easily until it stopped. borrowing indefinitely easily is a good recipe for a first- class crisis. >> this issue of where they
8:59pm
will put their money, there are two fundamental problems. one is the assets can evaporate. wealth is two factors. it is income wealth and future income. it gives you the value of the assets you really have to invest. there is a simple solution. what will happen is the discount factors will arise. there is a structure of other things people can do. they can take their money and put in goods. as a currency, there is gold.
9:00pm
the notion they cannot put the notion they cannot put it anyplace is nonsense. investors can and will do it in the wrong places for the wrong reasons. whatever they may do, it is not good. >> paul, do you want to add anything to that? he raised an interesting question. how do we give credibility we're going to do something this time when the problems we are describing are very complex? whether it is reforming the tax system or entitlements or whatever. do you have any ideas? >> if i had the answer, i would tell you. i would not keep a secret. it is a difficult problem when you are talking about something that has to take place over years. you do one of two things.
9:01pm
you have a target which is accepted generally by the president, congress. one way of expressing it is the way simpson-bowles did. what percent of the gdp will account for expenditures -- and use that for the spending programs, entitlements, defense, and civilian? it is hard to put it into law. you cannot predict what will happen several years down the road. do we have a consensus we want to get spending that is running as high as 25% of gdp? can we get it back to 20%? it is tough.
9:02pm
is 22% a reasonable goal? that is one way of going about it. the other way is setting a numerical target for spending and taxation. on the tax side, it is easier. you can change the tax law. you cannot change, i do not think you can have a lot of control of spending for 10 years. >> there is an interesting issue in policy. it is extremely difficult to rescind entitlements to which people think they are legally entitled. as you are doing that, you are abrogating contracts of some form. there are all sorts of constituencies under every entitlement program which support it. the issue is taxes can always go up and down. there are not the same political pressures there.
9:03pm
i think the issue is fundamentally spending. if we have to pay a high price in raising taxes temporarily in order to get spending down, i think that is a good deal. i do not think you can continuously keep this deficit open. if you raise taxes, we will turn the economy down. if the cost of getting out from under the problem is a moderate recession, i would say it is a cheap price. somehow thinking we will get through this thing without pain is nonsense. this is a very dangerous situation. it is not a question of whether we pay a large painful price or a small painful price.
9:04pm
the question is which is the least worst of alternatives. if we have to pay a large price in increasing taxes to get the extraordinary unstoppable rise in spending, we have to do that. then recognize it is politically easier to lower taxes than lower spending. >> let me take back a bit of what i said before. there are some areas you can work on. social security is less a part of the entitlement problem, but is a problem. i think is solvable by means that have been much discussed. when you put that in place, you have something that will last for years. theoretically, you can do something about medicare. i do not understand enough about
9:05pm
medicare to give suggestions. the entitlement program, you can redesign. defense spending, civilian spending depending on year by year appropriations is more difficult. put in place and say there is for 10 years. >> as i have listened to various schools of thought, it seems there are at least three. one is the short-term problem is so primary that we have to get around to stimulating the economy short-term and let the long term take care of itself later. alan, i heard you say getting the long term situation under control is so central that you are willing to take steps that
9:06pm
may retard the economy short term. then there is another school of thought that says you can do both in the following way. you can lay out a plan for the long term that will create confidence you are going to do something, but it does not get put into effect until the economy has recovered. what school of thought do each of the fallen to? maybe there is a fourth? >> i do not think the markets defined solving the short-term problem. we promise to pass legislation. let us now to the short term. they will start to laugh. the form of laughter is the markets are going to run into serious problems. we have got to stop. this is a problem. we are in a democratic society. in a democratic society, we all have our own ideas.
9:07pm
but compromise is not an abrogation of principle. it is a recognition we choose, in order to maintain the fundamental structure of our society, to compromise. we used to do that all the time. the stress between the parties is no greater now than it has ever been. you go back and look at the distribution of the caucuses in the house and senate. they all look precisely like they did with the conservatives and liberals 50 or 100 years ago. the problem is, unlike what we used to do 20 years ago, people used to speak to each other across the aisle and talk to each other and come to an agreement. it was never a difficult
9:08pm
problem. now i do not think they do. until that starts at a level that gives majority votes, i think this will be very tough. >> i take it there are people who say it is so difficult to get people to talk to one another that you have to create a crisis, which is the only thing that will get them talking to each other. in medicine, there is the phrase that disease is caused by the doctor. i do not know what that strategy leads to. but what do you think of that point of view? >> i do not disagree with it. is that what you are saying? >> you, paul? >> we may create a crisis like the current crisis over the cliff, the political crisis. >> why do we have a debt ceiling? we have an appropriations process that creates the spending level.
9:09pm
we have a tax code. if you are even remotely adroit in arithmetic, you can figure out what the president and congress have passed and what the debt of to be. now you come in with a new -- it goes back to the liberty funding act of world war i. originally, the congress had to pass legislation for every issuance of debt. they speeded up the process by putting in a debt ceiling and substituting. we have still got it. i do not get it, frankly.
9:10pm
>> if you were a congressman, you would elect to have the trigger to talk about it every once in awhile. >> why do they not spend time doing something about it? >> to go back to the earlier question, given the state of the economy, it will take some time to get consensus. it will not be january 2013. it is going to be 2014, 2015 before that gets put in place. it is not easy to change the tax thing where you say to get rid of some deductions and loopholes. they are there because people want them there. we ought to get rid of a lot of them.
9:11pm
there is a big debate as to which ones to get rid of and how. to think you will resolve it in two weeks or six weeks is foolish. >> you mentioned taxes. one of the biggest debates going on is what to do about taxes on those above $250,000. one of my roles is to try to present various sides of the debate. there is a school of thought that it is the over $250,000 that are so-called job creators. if you increase taxes on those, you will have a significant effect on the economy. this is part of a larger question of how serious the
9:12pm
effect is on the economy of raising taxes. let's start with a narrow question. suppose taxes were increased for those above $250,000, but not the rest. what would you guess the effects would be? >> zero. >> that is a nice, clear number. >> i do not quite agree. we can decide the issue of the political notions of who should get taxed. there is no question the vast proportion of personal savings which is the bigger part of gross domestic savings in the
9:13pm
economy are in the upper income groups. to the extent you increase taxes on them, you are essentially reducing savings. the data are clear on this. savings are a necessary condition for capital investment and productivity growth. leaving aside the argument as to what extent the issue affects the economy directly through the so-called job creation, i do not look at it as a job creation issue. that is a secondary effect. i look at it as a problem -- there is one remarkable stability in the economy in the last 40 years.
9:14pm
it is the sum of the social benefits to persons. the notion they cannot put it anyplace is nonsense. investors can and will do it in the wrong places for the wrong reasons. whatever they may do, it is not good. >> paul, do you want to add anything to that? he raised an interesting question.
9:15pm
how do we give credibility we're going to do something this time when the problems we are describing are very complex? whether it is reforming the tax system or entitlements or whatever. do you have any ideas? >> if i had the answer, i would tell you. i would not keep a secret. it is a difficult problem when you are talking about something that has to take place over years.
9:16pm
>> it is part of a total package >> you think is a price worth paying. >> are we talking about raising taxes? >> i do not think that changing that particular tax rate at this particular time will have a bigger effect on the economy. there is a good argument for x rates as long as possible. you get into corporate taxes and personal taxes and what you want to do about it. i would aim ultimately for a balanced budget. you want to aim for it as a low
9:17pm
as level as spending as you can get by with. i do not know what that is. it is lower than what we have now. that is a fundamental. we will devise a tax system that will produce what ever it will take into that in the most efficient way we can. the present tax system is well broken. i am not sure we can rely on the income tax as we have in the past. >> it is a terribly important point. remember what taxation is for. it is to fund the spending which would be appropriate. spending, first.
9:18pm
raise in taxes. this notion that we can somehow manage the fact that taxes and spending do not go together has been a failure. we have tried it for years, and you have been arguing against the deficit. the reason, as you may recall, the general ethos in the united states before i would say 1970's, or maybe even a little earlier than that, was the fact that the federal budget ought to be -- ought to have taxes equal to spending. i remember president eisenhower apologizing to the american people for a very small deficit. we got sophisticated with our macro economic models as how you can manipulate the economy by boosting fiscal policy. there is a terrible bias in the way the system works, which has led us to this fiscal cliff, which -- and without the debt ceiling. you have been railing against this, i regret to say, with no interest whatsoever, but we have come down to the point where our very sophisticated economic policies have led us to this point, and i think the way paul put it is exactly right -- you decide what you need to do for spending and then you raise whatever is required to fund the fact. and stop with this business of we can do it, 3% of deficit, because it does not change the
9:19pm
level of debt to gdp. that is factually correct, but it is irrelevant because if you do that, you will make -- you will not make that either, and that is what is happening. >> let me shift a little bit to europe and try to help me understand this situation. first, what lessons does the european experience teach us, and, second, there are a few indications that maybe europe is coming up with some possible answers to their problems. what happens -- a lot of the money has been flowing out of the euro -- what are the chances that europeans might be
9:20pm
getting their act together, and if they did, what effect would that have on us? >> do not think they are getting their act together. kicking the can down the road, what that is fundamentally doing is financing a very large part of the fiscal deficits of the 17 countries of the eurozone with central bank money. you can look at the size of the european central bank balance sheet, and last year it has gone up more than one trillion euros, funding essentially the deficits of the individual countries by lending directly or essentially buying the bonds of the particular countries. there is no evidence that -- the greek situation is classic.
9:21pm
i cannot imagine how the level of debt increases ever are to be paid off. the problem ultimately is that the guarantors in northern europe of some of the extraordinary behavior of the southern europeans is running into problems in the north, and i do not think this is coming- together. as i wrote in an article a year ago, i did an article in the "financial times," saying it is
9:22pm
a cultural problem, and i think the euro is going to have great difficulty holding together. >> paul, do you want to add anything? >> i hope it holds together, but it is a difficult road to follow. the levels of unemployment they have and some of the southern european countries, but i think the big lesson here is you refer to -- you have a situation where there was no restraint on greece and spain and italy and borrowing money cheaply partly because they were part of the eurozone and that failed provide the answers and they could borrow with the same industries as in germany. they borrowed and they got in trouble.
9:23pm
they are small countries. the united states is a very big country, but we have some of that symptom, and we do not want to have the breakdown that they had in europe when they reached the limits that the markets would take on their borrowing. the real lesson for us here is a fundamental lesson. >> i want to wrap this up a little bit. i want the two of you to play god for a moment. >> just play? >> perhaps you are already in that state. we have outlined today's challenges, short term, long term, and so forth. if the president were to call you in the oval office and say, ok, all things considered, what should i do, what would you have him do? >> i would like paul to answer that one first. >> as to what to do with this untenable situation, that
9:24pm
sequester, they need to do a short-term deal, do the hard work, and deal with the tax system, and you got to look at social security, medicare, and what can you do that is convincing in terms of the other expenditures over a period of time. that is a very tough thing, but is there consensus on the broad level of spending that we are willing to pay for in taxes? i am afraid that is more than 20%, which is what the historical relationship has been to gdp, but i do not know if it has to be much above that, but that is the question. >> alan? >> well, everyone is saying the right thing, so to speak. both the white house and congress. they have been saying the right thing for a long time, but nothing has happened.
9:25pm
i basically say unless and until we literally decide that we are willing to forgo some of our privileges on both sides of the aisle, we can talk -- we can posture as much as we would like, but it will not make any difference. you have got to act. the markets -- let me say this -- on september 14 -- i am sorry -- a program shortly after simpson-bowles was announced, i was asked -- barely understood that it had just come out -- whether simpson-bowles would be usable by the congress, and i said that simpson-bowles is what will ultimately pass, and the only question is whether it is before or after a crisis. i still hold to that view. >> ok. i have raised a lot of questions. what should i have asked that i did not?
9:26pm
>> you are always comprehensive. [laughter] >> is that what this conference is all about? >> i would be thrilled if that were the case. all right, please thank these two. [applause] very well done. you know how much of their lives they have put into this effort, and you two guys are heroes and patriots, and there is no way we can thank you enough. so thank you. [laughter] >> the challenges are pretty clear. we have to focus on accelerating
9:27pm
the economy and job growth. that means avoiding the fiscal cliff, extending middle income tax cuts. we should talk about the payroll tax component, which is a significant part of the fiscal cliff. we shall look at a one-year extension for some other mechanism that delivers the same economic benefit. >> $95 billion is the price tag. is that something the country can afford when the goal is to bring the deficit down? >> the goal is to make sure we do nothing to harm a fragile economic recovery. then to lock in a long-term path to credible, stable deficit reduction. we are trying to accomplish two things and once and make sure we do not do anything in the short- term to place a drag on the
9:28pm
economy. we should try to boost a fragile economy. >> how much latitude as the president have to do in terms of the negotiations? is he getting pressure from the democrats? does he have a free hand to talk about painful things like scaling back medicare in certain ways to generate savings there? >>the president has the confidence of the micrococcus in the house and senate. that does not mean there is a blank check. everyone will want to represent their constituents in the best way. there is a consensus the president has laid out the challenge clearly. and the president has pointed out that the approach he has taken was not some secret during the campaign. the president was one person who
9:29pm
was transparent about how he would approach these issues and laid out a clear revenue plan in terms of allowing the top rate for high-income individuals to return to clinton era levels. he had a tax reform component that low with the values of deduction and a clean way by dropping the value from 35% to 28%. he has put a plan on the table. we have not heard a plane from our republican colleagues. we heard a good turn from speaker boehner. we have not seen a particular plan with respect to the other issues -- the approach we believe we should take to health care and medicare is to contain cost in the overall health care system. the per-capita increase in cost in the private health care system is running higher than in the medicare system. transfering costs onto
9:30pm
individuals and not a stress the fundamental problem. move away from a fee for service system in medicare. that is the better way to go. >> the run ideas past few that have been floating around the hill. raising that trigger in terms of higher taxes for those earning a million dollars a year or $500,000 per year. how will that play? how will that play in the democratic caucus? >> people will consider various options. the fundamental issue -- make sure we boost job growth and make sure we put us on a path to long-term sustainable deficit
9:31pm
reduction. the issue is what is the revenue to cut? look at the simpson-bowles plan. look at the overall framework. look at the revenue component of how they get to their deficit- reduction numbers. the simpson-bowles revenue is more than what the president has put on the table. it is important everyone recognized that. if our goal is deficit reduction over the long term, what we have to decide a front is how we can get the revenue in the cuts. the issue with going to a dollars million threshold is that means less revenue coming in the next 10 years to hit that target. where were you make of that revenue? he will have to find it somewhere else if you are going to take that a balanced approach to a long-term deficit- reduction. >> $one quinn 6 trillion. is that the target that you
9:32pm
think is the right target in terms of the revenue? >> i do. i emphasize the fact that the simpson-bowles framework -- have a good framework in the sense that they have the right ratio of cuts to revenue. they recognize that their revenue estimates included in ther starting point. the route of never knew you would receive if the rate on top honors went back to clinton-era level.s that was the starting point for the simpson-bowles calculation. that is why they get the deficit reduction numbers they do. if you were to take up that assumption, they are about a trillion dollars short on their own deficit target. it is an important piece of their plan. the president's proposal comes in a little bit less on revenue.
9:33pm
1.6 trillion is a good target. less than simpson-bowles. look at his overall plan -- '-- s. . >> maybe his negotiating position would be enhanced if we went over the cliff. >> i do not think we want to go over the cliff. we are trying to avoid going over the cliff. the real issue is whether our republican colleagues are willing to make those tough decisions before january 1, or whether they will only face those decisions after january 1. the president laid out a clear plan not just since the election but before the election for how to get there. when i say that speaker banner has set the right tone but the jury is still out on the substance of this proposal, let us see the substance. the president has been transparent. let us see what the speaker is
9:34pm
proposing because if it does not hit those targets, then we are not going to accomplish our goal of long-term deficit reduction with inappropriate revenue component. it would be really bad if we just kicked the can down the road here again. between what happens in the next six weeks and what happens over the following six months in a structured way, we have to lock in some assurances we will accomplish the goal goals -- a job growth and a sustainable, credible path to long term deficit reductions. >> what roles are market planning in this conversation? >> there are some investors out there. navy is on all tied to the fiscal cliff. investors -- >> there are lots of factors that go into the nervousness in the stock market.
9:35pm
there are these twin objectives that are weighing on people's minds. one is people do not want to much deficit reduction rain now because it would have a negative impact on the economy if we go over the fiscal cliff, from a numbers point of view, when you look at the congressional budget office 10 years out, you have your deficit to gdp ratio down below 1%. peterson institute have this the website. their mathematically, that would be the way to go. but it would have a detrimental impact right now on the economy. it would be a major drag on the economy. the trick is to accomplish both these objectives. one is to prevent the drag on the economy.
9:36pm
plan shouldt's jobs be part of that. but the that is part of the six- week discussion work immediately beyond is something we can talk about. we have got to do this piece. that chart illustrates there is an important revenue component to this. if you do nothing and go over the fiscal cliff, you are talking about $5 trillion in revenue over the next 10 years. 1.6 trilliont's one point s looks reasonable. if you go of the fiscal cliff, you get about $5 trillion in revenue over 10 years. the president says the list to about 1.6 trillion of the next 10 years. less revenue than simpson- bowles. >> you also get another $600 billion in savings from the pentagon.
9:37pm
what is your view about whether this country should be prepared to go beyond the $487 billion that the president initially targeted? >> i do think there are additional savings to remain in defense spending. it is important to be clear that those reductions were reductions from projected increases. it lot -- it was not a reduction from the baseline. if you go off the fiscal cliff, it is not anothe $500 billion billion. that was part of the simpson- bowles framework. the sequester is an irresponsible way to do with cuts whether it is defense or non-defense. it is across the board bus
9:38pm
soffex. in terms of the magnitude of defense savings, five of hundred dollar billion cuts for 10 years is excessive. there are additional savings to be made in defense. senator levin has said another heaven -- hundred dollars billion. the key is to -- we should not have the budget decisions driving these decisions exclusively. -and not be the main component. what is our military strategy? we are doing lots of things in military that are still looking toward the cold war strategy. we need to focus on what our strategy is for this century and align our resources that way. >> you played paul ryan during the vice-presidential debate. you know the paul ryan budget plan as well as paul ryan. you know it well. what can you say about the plan
9:39pm
knowing you were critical of it you, proposed it? what do you see in that plan that could be the basis for middle ground between yourself and paul ryan moving forward? you will be part of these negotiations. is there anything in the plan that could be the seed for compromise? any area that you would be willing to negotiate with republicans attacked there is very little overlap between the democratic budget and the house republican budget. there are some areas of, for its --, and brown. we believe that there are savings to be made in terms of rolling back many of the excess of agricultural subsidies. that is part of his budget. to get rid of some of these direct payments. we should agree on those issues fairly quickly. there are some items. you raise an interesting point that i want to emphasize, which is the term, ground is use a
9:40pm
lot. what we need here is not -- it would be great to find more common ground. compromise is required. not just identifying areas everyone agrees on. excepts something to do not like. in exchange for moving forward and accomplishing a national objective. and compromise has been in short supply in many parts of capitol hill. hopefully this action-forcing evans will allow us to move forward. it needs to move forward in the context of an understanding that these issues were central to the campaign. the vice presidential campaign. there are some issues that on the sidelines. this is that one of them. fiscal issues, but issues, tax policy issues were debated. >> the president has a mandate.
9:41pm
>> on this set of issues, when it comes to asking higher- income individuals to contribute more to deficit reduction so we do not have to back the other part of the budget that he has a mandate. he was elected. you see all the exit polls that indicate a majority of americans support that idea. you have got at least 50% of voters who believe we should have higher-income individuals contribute more. you have a good chunk of americans said say we should raise revenue generally. it is important to understand the president, myself, others believe that the balanced approach that has been laid out provides the correct framework for approaching this problem.
9:42pm
others have entirely rejected that framework. they have said that simpson- bowles' from work is not the way to go because of the revenue piece of it. >> do you sense something different this time around? you were on the supercommittee. i saw your frustration when there was no deal coming out. is the something tenderly different now? >> there are two bank debt are different. it is not a secret. a lot of them made this point in their statement. there are a lot of folks in congress on the republican side who tried to defeat the president. it was difficult to get any kind of cooperation. the president has been reelected. he will be term-limited. i put a stop in that than i to in the structure of the situation. while the fiscal cliff contains a great potential risks, it also
9:43pm
is an action-forcing event that create opportunity. it is a combustible mix of issues. what we do not want is for it to blow up in our face. it presents an opportunity. the president has laid out the challenge on the revenue side. it is important people listen carefully to what he said. we want to avoid would go to the fiscal cliff. he has said that he will insist that higher-income individuals contribute more toward reducing the deficit. let us think about if we were to go into january 1, january 2. all of these things reset. the president goes on national television every day and says -- the american people -- i am trying to provide tax relief to
9:44pm
98% of the american people. 100% of the american people will get tax relief on the purse to hundred $50,000 of income. our republican colleagues are saying -- nope. nobody did any tax relief unless a higher-income individuals get a bonus tax break on the and, above $250,000. that is the position they would be taken. that is the wrong policy. it is politically unsustainable. i hope our republican colleagues recognize that is unsustainable between now and the end of this year. but >> the good news is we have one of your republican colleagues waiting in the wings to talk about these issues. chris van hollen, thanks for joing us here at this prison foundation event. good to see you.
9:45pm
best of luck to you with the negotiations to come. we want to invite congressmen peter roskam. good to see you. also a member of the ways and means committee. he served in the illinois state senate with president obama. fed me give you to respond to what you have heard to chris van hollen on the notion of taxes and republicans being prepared to extend the bush tax cuts for those earning less than $250 a year to attack there is ambiguity on the democratic side of the aisle. there is something that chris did not say and that we have not heard from the president. the ambiguity is -- who is risk that there is a 250 description. there is a 500 description. there has not been a clear discussion on the impact of the past two entities.
9:46pm
i represent suburban chicago and many other folks across both sides of the aisle. i represent entities that are organized and very little discussion beyond the bumper sticker rhetoric on the impact of pass-throughs as relates to these higher rates. the second thing is the -- to notice what we have not heard from the white house? but we have not heard from the white house is a discussion of the other component that is -- where are the spending cuts and the savings? there has been a lot of discussion about that. there has not substantive discussion about where the cuts are. the president described a balanced approach as a 1-to-3 revenue to cut ratio. we have been having the conversation on the revenue side. there has been no offering on
9:47pm
the part of with these cuts are. house republicans are here, ready to be part of this discussion and part of the solution. we are interested in where is the substance as to relate to cuts? >> will you be disappointed if the president does not offer something substantive at the table? >> my hope is that he does. my hope is said he recognizes the parameters of his own rhetoric in the past and the framers that he articulated. my hope is that when he meets with the speaker and the other leaders that will be part of the discussion. i would be surprised if the conversation is completely dominated all on the revenue side. that would be a lot opportunity on the part of the president. >> will republicans be able to
9:48pm
look
9:49pm
an opportunity to trenton this thing. maybe there is a possibility that the president did not recognize how close he came to a deal with speaker brainer during the debt ceiling talks on the grand morning. when this comes close to him again, rather than thinking it was going to be a better deal if you wait longer, maybe there is
9:50pm
the possibility of him seizing not. i have seen this characterization in president obama when i served with him in the illinois senate. i have seen him reach to a moment that was significant. there is a possibility he could do that now. >> if the grand bargain that president obama and speaker boehner were talking about two years ago were put back on the table right now, with the house republican conference that speaker boehner? the $800 billion. >> through growth, deductions, loopholes, so forth. i have not what this vote. >> she may have to. >> tell me about that. the house republicans are poised to move in that direction. is the speaker hunting out a head of the pack?
9:51pm
i do not think so. he is leading the house in a way. he is reflecting what a majority of house republicans are. >> for anyone suggest that speaker boehner the o's and without full support of the republicans would be wrong to attack that would be wrong. what is the speaker doing today? he went out after the president's victory on tuesday. he went to the cameras, offered sincere congratulations, and laid out a pathway for a way for us to mat get out of this. it was a good way. there is some language about compromise and common ground. we have to figure out a way to avoid this fiscal cliff and all the trauma that would ensue if we go over it. the speaker laid out a pathway and said to the president -- lead us on this pathway.
9:52pm
we are telling you we can come up with more revenues. take the victory lap on receiving additional revenues. the republicans take a rare victory lap on keeping these rates low. he eclipsed the whole scene. let us move into the tax reform agenda. the chairman of the committee has laid this out of the next two years. >> let me get your take on with this conversation might go. do you have a preference? do you think it would be more politically feasible to cap those deductions or you do not have to pick and choose which ones survive and which ones do not? need to look at these individually? >> you cannot come up with a tax
9:53pm
reform package during the lame- duck session. that has largely been debunked. i would be very open to having more input on that. and figuring out where are our members on these things? remember when harry reid was able to sit back in a corner and say this is all very interesting. let us talk about what can pass the senate. it had the sense of clarifying the conversation. the fluff with go to the wayside. it is important for me to get a sense of where our members are. it is the type of thing that you want to have a more robust hearing process, and not have something that is written in the speaker's office in the ways and means committee and senate finance fully back. >> if you push it to 2013, and
9:54pm
allow the jurisdiction to work their magic, there is a sense of kicking the can down the road. tough choices need to be made renown. the markets want to see this done. business leaders say -- is that need to get this done. >> there is no question that is when the market is calling out for. that is not unreasonable. the final disposition of these defense the defense will not conclude december 31. much like the markets, congress is going to have to do more work in the next fiscal year. if the expectation that this gets done and there is a pretty bow on it december 31, there are pumping sunshine. it will not happen. >> pumping sunshine. everyone got that? it does not sound like it will happen. i have heard from a lot of republicans -- the democrats go
9:55pm
further on medicare, we may be prepared to go further on the revenue side. what would you take as a sign of movement on the democrats' part in the administration's part when it comes to entitlements programs? is there a marker for you you will be looking for? >> there is an attitude or a shift for a disposition that we are looking for. that is to see substantive -- put something substantive on the table. i did not over characterize how underperforming the white house has been in terms of a description and a disclosure of these types of cuts. to the extent that the president is feeling a mandate as it relates to taxes, house republicans are feeling equally vindicated as it relates to passing the ryan budget, king on medicare, and the third rail of politics, and coming back with
9:56pm
the second biggest house republican majority since world war ii. there is a sense of the house gop in the last congress cross the political rubicon. that was to take the treasure of entitlement program everyone loves that will be insolvent outside of a decade, wrestle it to the ground, , with a revenue, go to the public, win reelection and come back and say -- there is something robust air. there is something concrete. what we have not said is -- it is our way or the highway. what we have said is -- or is a way forward that we think is a winning issue from a political point of view. it did not cost the house republicans the majority by taking the issue on. there was a lot of work and soul-searching and hand wringing internally before we presented the bill on the floor. when we did, you got this sense of -- ok we have done something. let us move forward. in terms of lines of about sand
9:57pm
or markers, we are looking for a raise of an eyebrow or a handshake or anything out of that acknowledges that these entitlement programs have to be part of the mix and that we cannot continue to say -- it is all fine. will go away. >> it may have to be a multi trillion dollar rates of the eyebrow. that's me share with you -- we have questions from facebook fans and foundation supporters were elected officials. you get to be the beneficiary to. given how hard it is to cut spending in washington, is a long and the fiscal cliff to happen a staff of except in the right direction? >> going over the fiscal cliff is crazy. it would have such an adverse impact on our military. secretary panetta has said it is devastating to the us
9:58pm
military. it was meant to be a provocation for action. it is a successful provocation for action. everyone is talking about it. we will figure this out and get this done. in terms of using it as policy, i would argue against it. >> another question -- why not adopt simpson-bowles? how would to create a better plan? why not cut to the chase, these folks negotiated a bipartisan plan. is it the solution? >> there is a brightness to simpson-bowles. punitive nature tot wi all of these talks. i-- there is a cumulative nature to all of these talks. i look at the work that vice- president biden had. i look at conversations between president obama and the speaker
9:59pm
as foundational and the work of a supercommittee. for the disappointing? yes. you build on them. the reason i was not in favor of simpson-bowles and you did not see house republicans in favor of it was because of the same question as it relates to taxes. we think we have offered an alternative so the president can get his revenues that he needs. take the victory lap. say i have got these new revenues that are coming in as a result of willingness of the republican congress to work with me. take the victory lap. eclipse the scene and move to tax reform as fast as you can. >> chris van hollen suggested the president had a mandate from the election on the issue of tax breaks for the wealthy. do you subscribe to that? >> no. if the president had a mandate, nancy pelosi would be the next speaker of the happen. that one not happen. >> what about your outlook?
10:00pm
how confident are you right now as these negotiations began at the end of the day there will be a deal that you and your colleagues can support? >> very confident. there is an opportunity the president has to lead the country in a way that he wanted to in 2008. the president did not have that in 2009. move forward with the agenda entirely. now there is a restraining influence known as house republicans. i think there is an opportunity for both men, the president who i know in my days in the senate, the speaker of the house, and their dispositions to come up with a remedy to get them out of this. >> will it be better if it is the two of them in the room? >> i think they both have
10:01pm
temperaments that can get 2 yes. that is a good thing. >> thank you for joining us here. one of the players and these negotiations. >> next, members of the house comment on the testimony about the benghazi attacks. and then congressional black caucus chair comments on the for this is -- criticism of susan rice. tomorrow on "washington journal," julian sanchez on the privacy of e-mails when and federal investigation is involved. charles komanoff talks about
10:02pm
taxing co2 emissions. and anna edney on the fda. 7:00 eastern on c-span. >> truman was vice president for 82 days. being truman, he actually presided over the senate. that is the vice-president does not bother with that unless a vote is needed to break a tie. he said, that is my job. truman never learned anything from fdr or from his staff. it was a transition with a zero knowledge. that does not happen anymore. he got a phone call from the white house. get to the phone right away. he picked up the phone. at the other and they said, get to the white house as soon as you can. so he grabbed his hat and dashed out.
10:03pm
he had a car. they gave him a chauffeur. he was taken upstairs to the second floor, that is the family for. he was met by eleanor roosevelt. he looked up and she said, the president is dead. he was in total shock. he said, what can i do for you? she said, harry, what can we do for you? you are in trouble now. >> from his early life through his presidency,aida donald looks at the life of harry truman. >> david patraeus testified on a hearing on the consulate attacked in benghazi. he stepped down last week
10:04pm
because of an extramarital affair, but he has agreed to appear before a house and senate investigative committee. following the committee we hear a reaction from peter king and others. this is about 30 minutes. these talking points that were put up? >> basically we are still not clear how the final talking. the marriage. they said it went through a long process involving many agencies. the department of justice, the state department, nobody knows yet who came up with the final version of the talking points other than to say the original talking points or different than
10:05pm
the ones that were finally put out. as far as general patraeus, his testimony was from the start he told us this was a terrorist attack and the terrorists involved from the start. the clear impression we were given was the overwhelming amount of evidence was it the rose out of a demonstration and was not a terrorist attacks. i pointed out the following week when she said it was a terrorist attack in made headlines. the administration was setting it was not terrorist. it was very cordial if you will. general patraeus is an upstanding patriot. we all shook hands and thank him for his service. but i think he has a different impression of the impressions left. >> can you tell us whether or not his affair for security
10:06pm
issues came up at all? >> one question he was asked at the start if it had any impact on his testimony. he said, no. >> our the talking points different? >> there were originally much more specific about al qaeda involvement. indications of extremists. to indicate even though it was clearly evidence of the c.i.a. there was al qaeda involvement. >> did you get any idea why it was changed? >> this said it goes through a long process. >> did he seem concerned things have been changed? >> they did not realize the full significance of that. for an unclassified statement, this was acceptable. it is still very vague. they he relay any of your concerns?
10:07pm
are you satisfied with what he said today? >> i am satisfied with the ultimate conclusion he reached. i disagreed with his recollection of what he told us on september 14. >> what would you say about the affair? >> no comment at all. >> did it make it hard to get to the brass tacks? >> it was made clear from the start that would not be a focus of the questioning. that was off to the side. >> any reason you wanted to hear from him was because he went to libya, so he was -- is there anything you can tell us he learned from being on the ground? what's that is classified other than the fact they now clearly believed it did not arise out of a demonstration. it was not spontaneous. there was cleared terrorist involvement.
10:08pm
>> [indiscernible] >> this is still on going. people at the white house, anyone at the white house change the talking points. >> do you think you will hear from him again on this? >> one day at a time. >> did he provide any information on how it took so long to come to that conclusion? >> he was sang through many strands of intelligence, but he said he thought he made it clear all along that he thought there was significant terrorist involvement. that is not my recollection of what he told us september 14. >> did he seem tired or were down from the scandal? >> he is a strong soldier. he was very professional and knowledgeable.
10:09pm
spoke to him at the beginning of the hearing and the end of the hearing and he is a solid guy. i consider him a friend. that made the questioning tough. >> how long did the testimony last? >> we ask the questions. sometimes the adrenalin is pumping. you realize the human tragedy here and he is going through an awful lot. it is easier when you dislike the guy when you are asking him questions. >> [indiscernible] >> he did not watch the testimony. >> did he speak with her beforehand? >> no. >> [indiscernible] >> the cia said the talking points for drafting or around al qaeda affiliations, terrorist activities.
10:10pm
they said after it went through the process, whatever the process is which they seem unclear about, that was taken out. >> how long did the testimony last? >> he spoke about 20 minutes. so one hour 10 minutes of questions. >> [indiscernible] >> i guess it is how you define it. >> did he talk about the films, the videos. >> yes, nothing controversial. >> did you watch any films today? >> no, sir. we saw that yesterday. >> [indiscernible] >> he did not know. the process was completed, and
10:11pm
they said, go with us talking points. i dug the impression it involved nine different agencies. >> did he give you the impression he was up said it was taken out? >> no. they okayed it to go. they said, it was ok to go. >> what does he say he thinks who committed the attacks? >> i would leave it at al qaeda affiliates. >> [indiscernible] >> there was a certain amount of awkward as, sure. all of us have a great regard for him. i have known him for nine years now. i actually urged him to run for president a few years ago. i consider him -- i know him
10:12pm
fairly well. any time you see human tragedy for a good person it is hard to go through. >> was there any discussion of the national security -- >> no. he read -- he addressed at the beginning. that was basically it. >> [indiscernible] >> was he involved in decision making on the night of the attack? >> he was definitely fully affair of what was going on. i cannot get into any of that. >> did he say the first attack was spontaneous but the second was more organized? >> the spontaneous aspect is minimize time now. it was primarily a terrorist attack. >> did he address how he
10:13pm
interpreted the anti muslim film and how that got to be a part of the discussion to the peace >> the other affirmation letter that said -- >> they also at the time had a clear affirmation that this was strong involvement with al qaeda affiliates. that was not a part of the presentation at the time. >> the former director was going to explain two streams of intelligence, one suggesting it was the protest resulting from the anti muslim video. is that the way he described it to you? >> he said today at the time he was also emphasizing the al sharia. >> is the hearing over?
10:14pm
>> yes. >> did i do this yesterday or the day before? ok. has mike rogers come in here? ok. he is going big time this sunday. he is going on "meet the press." get down on your knees. ok. let's go. showtime. >> what did you learn in the briefing? " i think it was very positive that general patraeus agree to come before our committee. i think the fact it was good for the country, it was good for the intelligence community and for general patraeus to bring closure to a lot of issues he needed to take care of and testify before our committee. we spoke about the first briefing he gave us where there
10:15pm
is a dispute about what he said. he reinforced the fact he initially for the first 24 hours felt this was a protest with what happened with the film. he clarified after more information came in, there was not a protest. he also did clarify that he made in this statement to us there were extremists in the group and they were al qaeda affiliates. that is important because that has been a debate for three or four weeks. >> congressman king was setting his recollection is that the then the director talked-about extremist elements but he downplayed it the big time. the emphasis was more on -- >> it is all about your
10:16pm
perception and the information you receive. when i was there and chairman rogers was not there, my recollection is that we felt it was as a result of the protest -- that was at the beginning. he said in the group there were extremists and some al qaeda affiliated groups. he clarified it. it goes to show that we try to it and freshened out quickly. because the congress will not hear about it or the media, --er he >> with in the first 24 hours did they believe this was a terrorist attack? >> yes, that was set at all times because the people in the grouper affiliates of al qaeda
10:17pm
and extremist groups. >> if that was a description that it was a terrorist attack, was that affirmation communicated? does that not contradict the idea of spontaneous demonstration? >> i think if you look at the facts and what we learned yesterday as far as the film is concerned, the first incident was a lot different than the second incident. that is the difference. when you look and see what is there, you have individuals coming into the compound who are looting. there is no demand and control about revaluating where or how we're going to do. there are people setting buildings on fire. the second incident was different. it was well organized. people who had experience in attacking in al qaeda knew what they were doing and how to shoot and hit targets. there were two different types
10:18pm
of situations, the first and second. that is probably were the opportunistic issue comes into play. they got real well organized and the antics were a lot more serious and well controlled by the terrorists. >> was it an intelligence failure? >> that is getting information as it comes. in the initial situation, this is what they understood. the investigation involves. the fact you could then start to interview the people on the ground, which is important. getting the tape which is important. we had to get our americans out of there. it was a serious situation. there was a thing about the fbi not coming back for three weeks. they had to make sure their lives are at risk. we had to rely at the beginning with an unorganized government
10:19pm
.orking with us heade we talked some about susan rice. she got a lot of the same affirmation we did. i will make a comparison to:pal. getting information from the administration on the fax. -- colin powell. i said they knew right away they were terrorists involved in the operation. >> did you understand my question? if we do within 24 hours it was terraced related, how come five days later she is still saying it was a spontaneous demonstration? >> i did not talk to susan rice. she received information. he was not a part of briefing
10:20pm
susan rice. affirmation can together with different agencies that came along giving of permission to susan rice or anyone else. >> he was the head of the -- >> he was the head of the cia. he personally did not believe this is an arrest. >> does he not over see all of the -- >> part of the team of the cia which he is in charge, yes. the bottom line is that the initial the affirmation that we got is what susan rice got. basically it's said at the beginning they thought it was an event as a result of the film out. later on they found that was not the case and changed the situation. the other issue as far as susan rice is concerned is she went before the administration and made the comments. i do not know how much further i can go in with susan rise.
10:21pm
i did not talk to her. all i know is what she said and she received a lot of the same information we did. >> the briefing, was that patraeus briefing the committee? >> that was patraeus briefing the committee. >> is there another today? what we are having the ranking members involved in jurisdiction somewhere. i am really getting ready to go there now. >> you seem satisfied with what patraeus told you today. >> i think he stated exactly what he said to clarify what he said the first hearing. i think the fact he was the head of the cia -- even though we have a lot of mistakes for -- a lot of respect for mike morrell. we also talked about his trip to libya. our role is to follow the facts.
10:22pm
get away from the emotion and media hype and determine what the facts are and we questioned him under oath to make sure that occurred here that is what we did. >> are you going to change the assessment from saying it was al qaeda involvement to saying it was a spontaneous reaction? >> new information came in. it tells us what you get from the ground. when you get intelligence, you collected and given over to analysts. the send it out. kept evolving over the process. >> [indiscernible] al qaeda got stripped out by state doj and others. >> i am not aware there were not taught at that point with the talking points. >> the question is a but the
10:23pm
scandal that led to his resignation? >> there was a mention of that, and his comments were basically that he was very sorry that this occurred. anything that occurred with respect to his personal situation had nothing to do with the way he handled benghazi at all. he also clarify this because this was of their, too. his resignation was that he did not want to testify. clearly that was not the case. >> did he say there was no national security issues in regard to the scandal? >> we did not get into that. >> was a condition of in coming into the briefing that he not be -- the media has not seen him at all. was that a condition of him coming? >> i did not ask about conditions for the briefing. >> why would you supply security of this nature?
10:24pm
>> that is an administration issue. you have to talk to them about that. >> or you try to protect him? the whole committee trying to protect and so we would not get a shot or see him. >> 7:10 and i talked to him for five minutes. i did not have a conversation about the fact on how he came. you are the head of the fbi -- the cia at the time of benghazi. this has become a political issue. let's go to the facts now. let's bring closure to this situation. i thank him for his service and that was it. >> you did not know a special arrangements for his detail? >> no. >> did he say how he felt about the change made in the assessment -- peter king said the al qaeda mansion was taken out.
10:25pm
>> i will have to look the debt. i cannot tell you what that issue is. the important thing is what he said. we all know fax challenge -- we all know the facts change to let congress know and to let the public through the media -- a lot of information can change. that is what occurred here. we want to get it right. intelligence is an evolving process. there were people injured who were interviewed later on the in germany. i think the most important thing was the real time information to that yesterday seeing the film on the first attack. that clarified a lot of issues. >> [indiscernible] >> we have a court reporter, but you are not supposed to lie to us. we could probably make a criminal case if he lied.
10:26pm
>> and the follow-up questions you are asking about benghazi >> ranking members had to deal with this to had some kind of clearance. democrats and republicans are going to have the same briefing as we had yesterday. i do not think it will show that the film. >> [indiscernible] >> we are leaving afghanistan. we still have to have some presence to protect our interests. we will have an intelligence components and some kind of special operations. general patraeus is one of the few people who had the military experience and the intelligence experience. those two combinations made him very important and qualified.
10:27pm
i would hope there would be an opportunity for him to give advice in certain situations. >> do you know when they knew it was a terrorist attack? >> i think they felt from the very beginning there were people that were there the or affiliated with al qaeda. we do it was a hostile area. we had a lot of people from other countries coming in. that was a concern for us. initially, the intelligence committee sent affirmation that this was a hot spot. they did not protect -- they did not predict an attack would occur. >> you said his resignation had nothing to do with benghazi.
10:28pm
>> i am not sure if i asked him the question. basically, he made the statement. somebody made the statement. maybe he volunteered it from the beginning. his resignation had nothing to do with the benghazi or that he resign so he would not testify. i do not think there is dispute with that issue. take care. >> i think it was very informative. regrettably the majority decided not to show the video. we had a lot of questions about why we are not showing the video. i think the frustrating thing about this is there has never been any question from the beginning that this was a terrorist attack. what we have question is, how
10:29pm
far plan was it. it appears not even with the best intelligence this was somewhat spontaneous. in libya there are armed extremists. it launched an attack in the same way the people in cairo did, primarily in response to the video. it was both a terrorist attack and spontaneous. why that has to be mutually exclusive is beyond me. we are still investigating to figure out who the groups are. it appears some of the armed extremists took advantage of the situation. briefly they organized and armed assault. nobody has ever denied that. i think the over poll liberalization of this -- we have some important questions to answer this. -- politicization of this. what is the nature of the developments in north africa, how strong of a threat to they how strong of a threat to they posed to